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02Dec2015 Market Close: The Roller Coaster Went Downhill Today.

Written by Gary

Up one day, down the next. The market is creating a rough ride for long term investors. Was the shootings today in Southern California the cause of the down market? or maybe the fact the Fed is sending so many signals on whether the Fed will raise their federal funds rate? or maybe it was the fall of oil prices below the $40 a barrel threshold.

Todays S&P 500 Chart

Quite honestly, this pundit cannot make heads or tails out of the signals the fed is sending.

The Market in Perspective

Here are the headlines moving the markets.

Exxon withholds tax data from global transparency group

WASHINGTON (Reuters) - Exxon Mobil Corp has not shared information about its U.S. taxes with a global transparency effort that the company has endorsed and that President Barack Obama has backed, the project's organizers said on Wednesday.

Sumner Redstone is mentally capable, says Viacom board member

(Reuters) - Sumner Redstone's physicians have publicly attested that he is mentally capable, William Schwartz, chairman of Viacom 's governance and nominating committee, wrote in an e-mailed to Reuters Wednesday afternoon.

American Eagle says holiday season sales off to strong start

(Reuters) - Teen apparel retailer American Eagle Outfitters Inc said its holiday season sales were off to a "solid start" and named interim Chief Executive Jay Schottenstein as its permanent CEO.

Wall St. slides as California shooting adds to investor worries

NEW YORK (Reuters) - U.S. stocks closed sharply lower on Wednesday as a shooting in southern California added to investor jitters about rising interest rates and oil prices that dipped below $40 a barrel.

Boeing completes detailed design for longest Dreamliner

(Reuters) - Boeing Co said it completed detailed design for its newest and longest of three 787 jet models, the 787-10 Dreamliner, two weeks ahead of schedule.

Yahoo shares rise as board meets and considers sale of Web business

(Reuters) - Plans by Yahoo Inc's board to consider selling its struggling Internet business sent the company's shares up more than 5 percent on Wednesday, as investors cheered a potential new way to separate Yahoo's traditional services from its valuable investment in Chinese Web merchant Alibaba.

Yellen says 'looking forward' to day of rate hike

WASHINGTON (Reuters) - Federal Reserve Chair Janet Yellen said on Wednesday she was "looking forward" to a U.S. interest rate hike that will be seen as a testament to the economy's recovery from recession.

Target in $39.4 million settlement with banks over data breach

(Reuters) - Target Corp has agreed to pay $39.4 million to resolve claims by banks and credit unions that said they lost money because of the retailer's late 2013 data breach.

Exclusive: Barclays' boss wants Blythe Masters to run investment bank - source

NEW YORK/LONDON (Reuters) - New Barclays Plc Chief Executive Jes Staley has approached his former JPMorgan colleague Blythe Masters to run the British bank's investment bank division, a person familiar with the matter said on Wednesday.

The Rise Of The Right: French Nationalists Hunt, Beat Muslims

The day after the disaster in Paris, Marine Le Pen - leader of France's right-wing 'Front Nationale' party - called for the nation to "re-arm itself" and "eradicate" radical Islam, warning the French people that they are "no longer safe." So, it is hardly surprising that the inevitable fall-out from this ultra-nationalist commentary has resulted in Frenc citizens taking their own protection into their own hands...

As the following clip shows, French 'patriots' are hunting Muslims in Paris...

Brazil Devolves Into Full-Blown Political Crisis As Impeachment Proceedings Against President Rouseff Are Launched

Just when the Brazilian depression (as we first called it in December 2014 and as Goldman confirmed a year later) appeared that it couldn't get any worse, especially in the aftermath of the BTG Pactual scandal which saw the CEO of Brazil's "Goldman Sachs" arrested last week, the bottom fell out of the floor for Brazil following news that the long awaited impeachment proceedings against Dilma Rouseff would finally begin.

Moments ago Brazil lower house chief Eduardo Cunha announced that he has accepted an impeachment request filed by Helio Bicudo. Cunha told reporters in Brasilia that the decision is not political, and while one can debate that, the implications will have a tremendous impact on both Brazil's political situation not to mention its already imploding economy.

As a reminder this is the country where a sweeping corruption investigation into state-owned oil company Petrobras has already implicated some of the country's most powerful politicians and businessmen with the latest to be dragged into the probe being Andre Esteves, the head of the "Goldman of Brazil" investment bank BTG Pactual, who was arrested last month.

Yesterday Brazil also just reported its biggest GDP drop on record which hardly helped Rouseff's case to push through more fiscal austerity measures. At this point it is clear that all budgetary plans are officially dead.

Finally this is the country hosting next year's Olympics: at the rate it is going, it just may announce in the last moment the Olympics have been cancelled. We wonder if there is a Plan B for when Rio throws in the towel?

Don't Show The "Data-Dependent" Fed This Chart... Ever

Spot the year that the "data-dependent" Fed will raise interest rates...

As Macro-Man adds,

...while one ISM number likely won't sway the Fed it's worth taking a step back and taking stock of some trends in the economic data.

If it seems to you that the US data has been disappointing for quite some time, well, you'd be right. In fact, the Bloomberg economic surprise index has been negative every day this year except the first two. To say that this year has been a bit of an outlier for economic disappointment in the 15 year history of the series is a bit of an understatement!

While it's worth stressing that the chart represents the data surprise relative to forecast, not the actual growth trend, it's really quite remarkable that an institution that keeps paying lip service to "the data" is finally preparing to hike when said data has disappointed expectations for the better part of a year straight.

The Shocking True State of the Financial System Today

For six years, the world has operated under a complete delusion that Central Banks somehow fixed the 2008 Crisis.

All of the arguments claiming this defied common sense. A 5th grader would tell you that you cannot solve a debt problem by issuing more debt. If the below chart was a problem BEFORE 2008... there is no way that things are better now. After all, we've just added another $10 trillion in debt to the US system.

Similarly, anyone with a functioning brain could tell you that a bunch of academics with no real-world experience, none of whom have ever started a business or created a single job can't "save" the economy.

However, there is an AWFUL lot of money at stake in believing these lies. So the media and the banks and the politicians were happy to promote them. Indeed, one could very easily argue that nearly all of the wealth and power held by those at the top of the economy stem from this fiction.

So it's little surprise that no one would admit the facts: that the Fed and other Central Banks not only don't have a clue how to fix the problem, but that they actually have almost no incentive to do so.

So here are the facts:

1) The REAL problem for the financial system is the bond bubble. In 2008 when the crisis hit it was $80 trillion. It has since grown to over $100 trillion.

2)The derivatives market that uses this bond bubble as collateral is over $555 trillion in size.

3)Many of the large multinational corporations, sovereign governments, and even municipalities have used derivatives to fake ...

Oil Prices Dip Below $40

The benchmark U.S. oil price tumbled below $40 a barrel for the first time since August on Wednesday, as a buildup of crude supplies signaled a deepening global glut.

U.S. Stocks Decline, Along With Oil Prices

Energy stocks led the broader market lower Wednesday as U.S. crude oil fell below $40 a barrel.

Yellen Signals Fed on Track to Raise Rates in December

Fed Chairwoman Janet Yellen expressed confidence that the U.S. economy is likely to register continued modest growth and a small pickup in inflation, a sign she is ready to raise short-term interest rates later this month.

December 2015 Beige Book: Economy Continues to Grow Modestly. Yellen Says the Economy is Growing Moderately.

Written by Steven Hansen

The consolidated economic report from the 12 Federal Reserve Districts (Beige Book) "indicate that economic activity increased at a modest pace in most regions of the country since the previous Beige Book report". The previous report said "point to continued modest expansion in economic activity during the reporting period from mid-August through early October". My interpretation is that the Fed is saying the rate of economic expansion is unchanged.

FOMC Chair Janet Yellen in a speech today (summarized below) believes the economy "has increased at a moderate pace .... close to its average pace over the previous five years".

The 10 Creepiest Places On Earth

Ten of the most terrifying locations around the world.

Star Wars, Barbie, Lego and Shopkins topped holiday weekend shopping lists

Hasbro was a winner, thanks to strong demand for Star Wars toys.

The Tell: It isn't too late to bet against euro: Goldman

A group of currency strategists from Goldman Sachs Group said Wednesday that there's still a compelling case for shorting the euro ahead of Thursday's meeting of European Central Bank policy makers.

The Wall Street Journal: As many as 20 injured in San Bernardino shooting

Law-enforcement officials said they were searching for between one and three suspects.

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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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